GST Council Clears Popcorn Tax Confusion, Check New Rates Before Your Next Movie Outing

The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, approved a simplified structure at its 56th meeting on September 3, ending months of confusion.

The earlier framework attracted criticism as it levied 5 per cent GST on loose salted or spiced popcorn, but a higher 12 per cent on the same item if it was sold pre-packaged.

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The long-running debate over how popcorn should be taxed under the goods and services tax (GST) regime has been settled. The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, approved a simplified structure at its 56th meeting on September 3, ending months of confusion. The revised rates will take effect from September 22.

Popcorn Tax Finally Standardised

Under the new system, popcorn mixed with salt and spices will be taxed at 5 per cent, irrespective of whether it is sold loose or in pre-packaged and labelled form. Caramel popcorn, however, has been placed under the sugar confectionery category and will attract 18 per cent GST.

The earlier framework attracted criticism as it levied 5 per cent GST on loose salted or spiced popcorn, but a higher 12 per cent on the same item if it was sold pre-packaged. With the new restructuring, the only distinction made is whether sugar has been added, reported Moneycontrol. This resolves an issue that had become symbolic of the inconsistencies within the GST system.

Cream Bun Classification Resolved

The Council has also addressed another point of contention – the tax on cream buns. Previously, cream buns were treated as pastries and taxed at 18 per cent, while cream and buns sold separately faced a 5 per cent rate. After feedback from the food industry and a direct representation made last year, cream buns will now be taxed at 5 per cent, bringing them in line with their components.

This move has been welcomed by bakers and retailers alike, who had long argued that inconsistent categorisation created unnecessary complications for both businesses and consumers.

Heavy Tax on Gaming and Sporting Events

In addition, the Council confirmed that all forms of online money gaming, gambling, horse racing, betting, casinos and lotteries will now be subject to a hefty 40 per cent GST. The same rate will apply to tickets for the Indian Premier League (IPL), although recognised sporting events remain outside the purview of this high tax.

Admission to such recognised sporting events continues to be exempt if ticket prices are not more than Rs 500. If the ticket price crosses that threshold, the tax applicable remains at 18 per cent.

Broader Changes and Economic Context

The Council also approved the shift to a dual GST rate structure of 5 per cent and 18 per cent, scrapping the earlier 12 per cent and 28 per cent slabs. The simplification will make several everyday essentials, two-wheelers, cars and insurance policies cheaper, offering significant relief to households.

The announcement coincides with growing global trade tensions after US President Donald Trump imposed 50 per cent tariffs on Indian goods. Analysts believe the GST restructuring could provide much-needed support to consumer spending at a time when India faces both domestic demand pressures and international trade challenges.

By ironing out ambiguities and aligning product classifications, the Council aims to bring predictability to taxation while providing a boost to both businesses and consumers.

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